Bournemouth Borough Council Bill  [Lords](By Order)
	 Order for Second Reading read.
	 To be read a Second time on Thursday 28 February.
	Canterbury City Council Bill  (By Order)
	 Order for Second Reading read.
	 To be read a Second time on Thursday 28 February.
	Leeds City Council Bill  (By Order)
	 Order for Second Reading read.
	 To be read a Second time on Thursday 28 February.
	London Local Authorities (Shopping Bags) Bill  (By Order)
	 Order for Second Reading read.
	 To be read a Second time on Thursday 28 February.
	Manchester City Council Bill  (By Order)
	 Order for Second Reading read.
	 To be read a Second time on Thursday 28 February.
	Nottingham City Council Bill  (By Order)
	 Order for Second Reading read.
	 To be read a Second time on Thursday 28 February.
	Reading Borough Council Bill  (By Order)
	 Order for Second Reading read.
	 To be read a Second time on Thursday 28 February.

James Gray: The Secretary of State can only judge the success of our political aims in Afghanistan if we know precisely what they are. Perhaps he could take this opportunity to clarify them for us. Is the aim to reverse the awfulness of the Taliban, bearing in mind that the Taliban were our allies against Saddam in 1991? Is it to defeat al-Qaeda and to remove the international terrorists, of whom there are many hundreds in Afghanistan? Is it to eradicate the poppy crop, in which case we could be alienating the very people who ought to be our friends? Or are we trying to establish a Guildford style of democracy, with universal suffrage and gender balance? Will the Secretary of State please be clear about precisely what we are trying to achieve in Afghanistan?

Keith Simpson: The Foreign Secretary quite rightly pointed out that there were a number of positive aspects to what has happened in Afghanistan in the past, but all hon. Members are only too well aware of a series of more recent powerful reports from national and international bodies, including the Department for International Development Committee, which conclude that Afghanistan is possibly beginning to tip towards failure. Will the Foreign Secretary clarify the strategy of the British Government in what is looking more like a crisis, because I fear that there is an element of complacency in his attitude? If we wait cautiously and slowly for the appointment of the new special representative, the position may get completely out of hand when it has already got far too serious for that to happen.

David Miliband: The situation is far too serious for complacency and I defy the hon. Gentleman to find any suggestion in anything that I or the Prime Minister have said that the challenges we face—security, economic and political—are anything other than extremely significant. We have made that clear in every article, speech or answer that we give, as I did in response to the first question today. However, it is not right to talk about the situation in Afghanistan tipping into chaos or failure. The analysis of the DFID Select Committee and others, including the Senlis Council, is similar to the analysis set out by the Prime Minister in December, so it is a shared analysis of the economic, political and also security concerns that apply in Afghanistan.
	As to our own strategy, the Prime Minister set out a number of features. First, the Afghan leadership is important, as we are there to support the Afghans, not to create a colony. Secondly, we want to ensure that we build up the local governance, to which my hon. Friend the Member for Birmingham, Northfield (Richard Burden) referred earlier. Thirdly and critically, alongside the military effort, we are pursuing an economic and political effort to ensure that ordinary Afghans feel the benefits in their everyday lives. That is what we are trying to engineer. Fourthly, critical to that effort are the responsibilities of both the international community and the Afghan Government to each other: the international community must be better co-ordinated and the Afghan Government must clean up corruption and other problems that have stood in the way of making progress towards a solution in that country.

David Miliband: I am sure that the hon. Gentleman will agree that our first priority is Mr. Mann's immediate welfare and the legal case against him. That is why we have put such emphasis on consular access, which has now been granted, and on making representations to the Government of Equatorial Guinea in the UK. I am pleased that we have received assurances from the Equatorial Guinean authorities that Mr. Mann will be treated well in detention. Obviously, we are monitoring that through continued consular access. A number of welfare points were raised during the visit of 12 February. We are taking them up and, within the limits of what we are allowed to disclose by Mr. Mann's family, I would be happy for the hon. Gentleman to see the explanations that we have received. He is right to raise both the humanitarian and the legal sides of the case. They are our current focus, and we can in due course turn to the role of the Government of Zimbabwe once Mr. Mann's future has been determined.

Brooks Newmark: Given that much of smuggling into Gaza is done by the Bedouin tribes through deep tunnels, I am curious as to what conversations the Minister has had with his counterpart in Egypt about gaining greater control over the Bedouins and the smuggling that they are carrying out.

Meg Munn: I am sorry that the hon. Gentleman does not recognise the huge effort from the UK to support the mission, as well as the substantial financial support that is being offered. We have lobbied hard to close remaining gaps in helicopter provision. We have targeted Egypt, South Africa and the central European states, including, as my hon. Friend the Member for Calder Valley (Chris McCafferty) mentioned, Ukraine, Bulgaria and Slovakia. The issue is that the helicopters need to be suitable for the circumstances and the terrain in Darfur. We need those helicopters, and it is important that we keep trying to get them as soon as possible.

David Miliband: The House will know that on 17 February the Parliamentary Assembly of Kosovo declared Kosovo to be an independent state. The declaration also committed Kosovo to fully implement UN Special Envoy Ahtisaari's comprehensive proposal, including extensive safeguards for all Kosovo's minorities.
	The UK has decided to recognise Kosovo's independence and establish diplomatic relations with that country. I have set out more details in a written statement that I have put before the House today, but I shall take this opportunity to underline three factors that have driven our approach.
	First, we share the view that leaving Kosovo's status unresolved is "unsustainable", to quote the UN Secretary-General. Secondly, after almost two years of intensive negotiations, it was clear that a mutually agreed settlement between Belgrade and Pristina, although desirable in many ways, was out of reach. In those circumstances, the implementation of the UN special envoy's proposals was the most viable way forward. Thirdly, the EU and other international players have made clear their readiness to play a leading role in implementing a settlement—a point demonstrated by yesterday's unanimous Council conclusions.
	We shall work closely with our international partners and Kosovo's Government to support Kosovo as she takes her next steps forward.

David Miliband: My hon. Friend makes an important point. The election results to be announced in Pakistan over the next week or so matter to us all, and the credibility of those results is critical to this country. I can assure my hon. Friend that we worked closely with the Government of Pakistan on the detailed arrangements in 64,000 polling stations for which they had responsibility and the importance of due process in those polling stations. The EU observer mission will be reporting later today, but I am sure it is gratifying for the whole House that despite, by our standards, large loss of life and injury over this weekend of voting, the allegations of electoral fraud seem to be small in number. There seems to be some confidence that, now that the governing party has indicated that it expects to spend time on the Opposition benches, the election results will carry credibility. I certainly intend to follow that up as the new Government are put into place.

Jim Murphy: My hon. Friend is correct. Somalia is generally regarded as being, perhaps, the world's only failed state. It has had 16 years of brutal violence and is indeed a human tragedy. My hon. Friend will rightly continue to raise the matter. We are determined to play our part in the international community and also with the transitional federal Government to make sure that there can be effective governance and a degree of reconciliation, and to ensure that those 16 years of violence are brought to an end.

Meg Munn: The Government consider carefully where we have our diplomatic missions and we make sure that there are appropriate arrangements for consular support wherever British citizens are in the world. As the hon. Gentleman knows, HM Consul in Lagos travelled to Malabo on 5 February and subsequently was able to visit Mr. Mann in prison in Malabo on 12 February. He will continue to keep in contact with Mr. Mann, and we will continue to provide excellent consular services to all British citizens wherever they are in the world.

Ann Clwyd: The UN special envoy on Burma is touring ASEAN countries in an attempt to get them to act together in relation to Burma, and he has confirmed that India and China have the most leverage over Burma. What influence are we exercising over India and China to get them to exercise that leverage?

Philip Hammond: My hon. Friend makes a good point. I am sure that he will elaborate on it in the debate.
	We do not support the proposed nationalisation, but, if it is to happen, we want to ensure that the legislation is workable and as fair as possible; that Northern Rock will be managed without political interference; and that competition in the market will not be distorted. We want to ensure that the process is open and transparent and that Parliament is properly informed of the progress of the company in public ownership.
	If the Government had those interests at heart, they would have done in their draft what we must now try to do through amendments: turn their warm assurances on arm's-length management, lack of political interference—a commitment that was made yesterday and broken within the hour by the appointment of Tom Scholar to the board of Northern Rock—and unfair competition into binding legislative constraints.
	We are willing to work through the night tonight to ensure a proper Committee stage. We are happy to sit on Friday to deal properly with Lords amendments. However, an "emergency" apparently occurs only when it suits the Government to override Parliamentary procedure, not when it risks Labour Members having to do a bit of a nightshift.
	We signalled our willingness to co-operate on a timetabled passage of a Northern Rock nationalisation Bill. We did not—and, in conscience, could not—acquiesce in the procedure for a Bill of extended duration and broad application. Twenty-four clauses and two schedules cannot properly be scrutinised in this House in the time proposed. Inevitably, the burden will fall on the other place. That means that Lords amendments are likely to be tabled, which, again, cannot be scrutinised by this House in the single hour allotted for that purpose.
	Taken together, the length of the Bill, its broad definition and the inadequacy of the time provided make the motion unacceptable. On the basis that the Government have our word that, if the business motion is defeated, we will not delay Third Reading in this House beyond 6 am tomorrow morning, and that we will deal with any Lords amendments returned to this House during the course of Thursday night and Friday morning, I urge my hon. Friends to vote against the motion.

Alistair Darling: If the Bill is approved, the necessary Order will be laid to make that transfer. As I shall say when we reach the relevant part, the Bill makes provision for compensation to shareholders under the terms and conditions that I made clear. In addition, the timing is clearly laid out.

Alistair Darling: No, I do not.
	The hon. Member for Runnymede and Weybridge also made the point that the Government are consulting on longer term legislation to make more substantial reforms to the banking system, and I believe that that has general support in the House. We are consulting on that because it is important that we get the detail right. Legislation will be introduced thereafter. Some clauses may be closely followed in that future legislation, and they are necessary not only to allow us to acquire the shares in the bank, but to deal with it after acquisition, with a view to returning it to the private sector.

Alistair Darling: If I had included in this Bill legislation to amend the Financial Services and Markets Act 2000, it would have been a formidable Bill indeed, because that is a very long piece of legislation. It is important that we continue with the consultation that we launched in January on some of the more far-reaching and radical reforms to the regulatory and supervisory system of banks and other financial institutions, with a view to introducing legislation in the remaining part of this parliamentary Session, so that we can get it on the statute book as soon as possible. Today's legislation, which is being introduced now because of the particular circumstances that we face, is necessary, as I hope to be able to demonstrate when I get to the detail of the provisions. I wish to say a word about competition, because that issue has been raised by Members on both sides of the House, and it is a perfectly legitimate concern.

Vincent Cable: I shall alight upon it and then decide whether I approve of it in principle.
	May I return to the central question of what kind of bank will now operate? Will it be built up or run down? The hon. Member for Newcastle upon Tyne, Central (Jim Cousins), with whom I have had several exchanges in the past few weeks, put it rather well yesterday when he asked whether this is the end of the beginning or the beginning of the end of this bank. That question is crucial. It is at the heart of the argument about the business model, on which Ron Sandler will presumably be asked to decide. It is not clear to me which of the two approaches is the better. A wide range of options exists, so one can envisage a kind of continuum, at one extreme of which the bank would be run off and would have no new business. The other extreme might involve a highly expansionary strategy—a kind of publicly owned Virgin or "the people's bank", as somebody called it yesterday. Alternatively, something between the two might happen.
	At some point, there must be a proper debate about which option will be chosen. This is a political issue; it is not just a technical issue for the man who has been appointed to chair the company. It is not obvious to me which is the best approach. My instincts suggest that given the excesses of the past, the bank is probably best run on a more conservative basis, but there is an argument for saying that if the primary concern is repaying the taxpayer, that could be done in two different ways. The assets could be run off to realise cash or the bank could be built up to sell it at a large profit. It is not clear which of those approaches is the better.
	There is an issue to address in respect of the staff, who are important in themselves. If large numbers of them are laid off, one must deal with not only the redundancy bill, but problems of retention, management and keeping the bank going effectively. A crucial human resource issue is involved, and somebody has to decide on it. The matter is political as well as administrative.
	The Conservative spokesman rightly mentioned the nature of competition and unfairness, and that is clearly important. It is complex, because the banking industry is not a normal one—Cruickshank reported on that several years ago—and other banks have lender of last resort privileges. A few moments ago, I saw the former chairman of Lloyds complaining on television that it was very unfair that Northern Rock would be the only bank that could not go bust. That is not true, because his former bank could not go bust either. The national savings bodies have complex competition arrangements. Insurance companies may well say that Aviva does not have lender of last resort facilities, but where an insurance company is owned by a bank, the parent company does. This is a messy area where competitive principles are very unclear, so there must be proper, publicly accountable discussion about which of the options will be taken.
	I want to discuss a second set of questions, relating to the inheritance from the pre-nationalisation stage. This is not the point at which to have an inquest or post-mortem on what has happened—the Treasury Committee and the Public Accounts Committee will have plenty of opportunity to do that. Some questions about the past are highly relevant to what happens now, the first of which was posed by the Conservative spokesman—how sound is the bank?
	An important contribution was made yesterday by the right hon. Member for Hitchin and Harpenden (Mr. Lilley). He reminded us of the scale of the repossessions that are now taking place. They run wholly contrary to everything we had previously been told about the bank's soundness. I began to become concerned about that matter about a year ago, possibly because of my particular personal interest—some would call it an obsession—with problems of personal debt and the housing market. It was clear that something very strange was happening with this bank and its performance. I questioned it, but the Financial Services Authority was completely blind to it. I recall being telephoned by the FSA's chairman on the day the crisis originally broke. He said that I was being irresponsible in talking about the bank and criticising its management. He said that it was a very well run bank with an exemplary loan book, and he asked what my problem was. Unfortunately, his position was undermined by the fact that at the same time a press conference was being held in the City explaining how Northern Rock's management had taken on rather a lot of the sub-prime mortgage liabilities in the US. None the less, that remains the official view, and as far as I know the Chancellor still subscribes to that description of the bank. However, we have had plenty of evidence to the contrary, including not just the evidence given yesterday, but serious brokers' reviews. For example, Panmure Gordon has said that bad debts were systematically hidden.
	There were therefore all sorts of problems with the bank and the next step—which I advocated yesterday and on the day of the announcement, and which has been taken up today—is for a proper, independent audit under the supervision of the Bank of England, and not carried out by the FSA, to investigate how sound the bank and its mortgage book are.
	The second inheritance from the past is the costs of delay. What were they? We have had questions already about the costs of financial advice, but there is a potentially much bigger cost, which is the cost to the bidders. Who has paid the bills for Sir Richard Branson and other bidders for due diligence and other costs, which have been formidable? I was alerted to this problem at the outset when it was said that 10 companies were interested in bidding. I happened to talk to someone from one of those companies and he said, "We are not going any further with this, because we have discovered that the Branson consortium has preferred bidder status and the Treasury is paying all its bills. Why should we compete on that basis?" A few days later, the other companies were told that the Treasury had changed its mind and would cover everybody's bills. I do not know what happened, but since last October bidders' costs have been paid by the Government. What are those costs? I suspect that they are a lot more than the Goldman Sachs bills.
	The question of costs is important not simply because we want to rake up the past but because if the bank is to be sold again we need to know the principles on which it will be done. That is why the status of the bidders and who covers their costs is important.
	A third question from the past is precisely how the Government came to make the decision to nationalise, which they announced formally on Sunday. Strategically, they made the right decision, but what steps led them to that conclusion? That is important, because if the bank is to be privatised eventually, the potential bidders need to understand the criteria that will be used. It has emerged in the press—we have no other source on this—that what seemed to have tipped the Government's decision were the scale of the fee offered for the security, the length of time of repayment of the taxpayer and what the professionals call the equity kicker for the Government. But there were many other issues involved that were not discussed.
	I wrote to the Chancellor and Sir Richard Branson about those other issues. They include, for example, the nature of the security that was being offered for Northern Rock assets, and the tax status of the bidders and their vehicle. Those issues have never been discussed publicly and, at some point, we will have to have a proper explanation of the process by which the Government reached that decision to ensure that when the eventual sale takes place there is complete clarity about the criteria.
	My final question is about Government debt. We all understand that by nationalising the bank the Government are taking on its full liabilities. Some of the newspapers yesterday, including the  Daily Mail in its headline, assumed that nationalisation would increase the Government's liability from £50 billion to £110 billion. That is wrong, because the Office for National Statistics classified the bank a week ago as a public company, under which all or most of the debt became public. I am not sure that that is the case either, as there may well be new commitments that have been taken on, and it would be useful to have an explanation.
	My questions relate to the Bill, to what it says and to how its provisions can be strengthened. The first issue, compensation, has been touched on already. The Conservative spokesman put it clearly and correctly: although we would all like to make a sentimental distinction between the hedge funds and the £100 shareholding grannies in Newcastle, it is not possible legally to do so. The practical, painful reality is that without Government support the shares would be worthless. Any independent valuer is bound to have to come to that conclusion, I would have thought—but those involved obviously need to fight their legal corner.
	The second issue relates to competition and how the competitive process will now be dealt with. I think the right questions have already been asked. Other banks will certainly make several points, such as about the deposit interest rate that can be offered by the new Northern Rock bank. Will it offer a higher rate of interest in attracting deposits, or the same rate of interest? How will it be constrained? What will its lending practices be? We know that in the past those practices have been extremely aggressive to expand market share. Will the bank be allowed to do that, or will it be constrained in some way? A more important question for competitors will be what will happen when the wholesale markets open. Will the Northern Rock bank be able to access them much more easily than other banks? A lot of questions will be asked about the fairness and appropriateness of competition.
	It is right to say that although the EU has rules, it also has a lot of state banks—in Sweden, France and elsewhere—that are accommodated in a fairly permissive way. It is not entirely clear that European rules meet our requirements. I support the measures to build in a role for the Office of Fair Trading.
	The Bill inadvertently opens up the whole question of the banking system in general, because it is about banks in general and not Northern Rock. We understand the parliamentary procedural reasons for that, but the Government have inadvertently brought forward an argument that we were going to have in six months' time about the nature of bank rescues, bank nationalisation, intervention and how it all happens. They have therefore brought to the fore an argument that was originally made by Cruickshank in 2000. The former chairman of the stock exchange made the point that this is a strange industry that has what it calls regulatory privileges. It pretends that it is operating as a normal commercial operation and the bankers claim to be buccaneers who are out there competing in the market, when of course they are not—they are ultimately underpinned and protected by the Government.
	The logic of Cruickshank's argument points in one of two ways. Either the industry must be much more tightly regulated against excess profits, as he put it—or, in some instances, companies should be nationalised—or it has to be fundamentally reformed so that new companies can come into banking much more easily and those that perform badly can go bust. One of the unexpected outcomes of the debate might be that we will go through the first approach, but finish up with the second. Eventually, the cosy little set up in British banking and the pretence at having a competitive industry will be broken. The industry will have to become genuinely competitive, like others are. Perhaps the Chancellor will be the author of a much more radical set of reforms than even he yet appreciates.

Frank Dobson: That may be the case. It brings to mind the time of the Oxford martyrs, when Cranmer, Latimer and Ridley were facing the Catholic experts. It was said at the time that in the arguments, Master Cranmer leant on Master Latimer, who leant on Master Ridley; Master Ridley leant on the singularity of his own wit. It is a pity that the Oxford fire snuffed out the wit in the Ridley family.
	We need to come to the wider question of why the other banks turned down the request for help. The answer is that irresponsible banks in the United States, Britain, Switzerland, France and Germany had all lost fortunes on what they call "sub-prime mortgages" in the United States. Other people call that lending money to people who could not pay it back.
	It was not just that the banks gambled and lost billions of dollars. None of them could trust what any other bank said about its potential losses. Some were making false statements and others refused to reveal what their losses were, so the banks cut down on their lending to each other, and none were in a position to bail out Northern Rock. The situation was not just the result of a failure of a single bank—it was due to the failure of the whole market. Those losses and that distrust have also stymied the Government's efforts in the past five months to get a private sector solution to the Northern Rock crisis. If the sub-prime mortgages crisis had not occurred, the chances are that there would have been a private sector solution to the problem, and everybody would have welcomed that.
	On top of all that, the Tories and their friends in the news media go on and on about how nationalisation has damaged Britain's financial reputation in the eyes of the world. However, it cannot do such damage in a substantial part of western Europe, where there are publicly owned commercial banks.
	In whose eyes do the Tories and their friends believe that Britain's reputation has been damaged? Is it in the eyes of Citigroup in the United States? It lost $24 billion in the sub-prime crisis. Merrill Lynch lost $22 billion, the Bank of America lost $5 billion and JPMorgan lost $3 billion. Has our reputation been damaged in the eyes of France, where Crédit Agricole lost $5 billion, Société Générale lost $3 billion and BNP Paribas lost $1 billion? Has it been damaged in the eyes of Germany, where Bayern LB lost $3 billion, Commerzbank lost $1 billion and Deutsche Bank lost $3 billion? Perhaps the Tories and their friends think that Britain's reputation has been damaged in the eyes of the Swiss, but UBS lost $18 billion, Swiss Re lost $1 billion and it has been revealed today that Crédit Suisse lost $3 billion.

Stewart Hosie: I would like to make a couple of preliminary remarks. The first is that the Bill is intended to allow for the nationalisation of Northern Rock, which will then operate at arm's length from the Government, with commercial autonomy for its decisions. However, that will be predicated on a framework agreement covering the relationship between Northern Rock and the Government that is yet to be published. My second remark is that the nationalisation expected to flow from the Bill has apparently been tested against the two private sector bids and deemed to represent the best value for taxpayers' money. I would like briefly to test that assertion.
	On 23 September last year, only a week or so after the Northern Rock crisis broke publicly, the BBC reported that at least 12 of the UK and Europe's biggest banks had declined to buy the bank. It quoted  The Sunday Times as saying that the
	"banks have estimated that it would require...capital"
	of
	"as much as £20 billion...to successfully refinance Northern Rock."
	Given that that figure was likely to have been the maximum taxpayer liability, should everything have been sought from a private sector concern, and given that it may well have been lower, in loans and guarantees facilitating a private bid, I am curious to know how the Chancellor and those on the Treasury Bench can argue, five months down the line, that a £110 billion liability for the taxpayer represents better value for money than a rather more modest contribution in loans and guarantees last autumn.
	I said that the framework agreement between Northern Rock and the Government has not been published. In addition, the new framework to regulate banking in the UK and protect depositors is out for consultation. The Chancellor said that that would take some months and require primary legislation. There are number of questions about the Bill and the sweeping powers that it contains. Given that the bank will operate at arm's length from the Government, why should we pass the Bill in the absence of the framework document?
	There are other questions to do with why we should support the Bill, given that we are to have a nationalised bank, with £110 billion of taxpayers' money, operating within a tripartite arrangement that many believe is not fit for purpose and which the Government intend to replace anyway. That tripartite arrangement not only is not fit for purpose, but may have been at least partly responsible for stopping or not facilitating a quick and early private sector takeover of Northern Rock last year, because of the confusion among the FSA, the Treasury and the Bank.
	Clause 3(1), entitled "Transfer of securities", says that the Treasury may by order transfer securities to
	"(a) the Bank of England;
	(b) a nominee of the Treasury;
	(c) a company wholly owned by the Bank of England or the Treasury;
	(d) any body corporate not within paragraph (c)."
	However, clause 8 says that if securities have been transferred to a specific named person under clause 3(1)(a) to (c) following nationalisation, provision can be made for further transfers—that is, transfers back—to the private sector. However, clause 8 seems to exclude any reference—I will stand corrected if I have missed it—to a body corporate that is not a company owned by the Bank of England or the Treasury. If that is the case, primary transfers of assets can be made to that body, but on my reading of the Bill there is no ability to transfer them back to the private sector later.
	Clause 4, on the "Extinguishment of subscription rights", allows the Treasury, where it has made an order providing for the transfer of securities from a deposit-taker, to acquire the securities not only of the deposit-taker, but of any of its subsidiaries,
	"whether the rights have been granted by the deposit-taker or otherwise."
	That provision seems extraordinarily wide, and I am concerned that it might preclude the breaking up of a group that is in trouble, where subsidiaries could be sold as going concerns to raise cash. It does not seem to place any restriction on securities from a subsidiary being acquired, even if they are worth more than the indebtedness of the principal deposit-taker, which could be the reason for the necessity for assistance in the first place. If that is the case, I suggest that this is a gaping hole in the Bill.
	The Bill is also riddled with terms such as
	"where the Treasury make...an order"
	and the Treasury
	"may by order make provision for".
	In the absence of detailed orders or a framework agreement between the bank and the Government, however, it is difficult to know precisely what the Government intend the Bill to do.
	The Bill is doubly confusing because clause 13(2)(a) states that orders and regulations
	"may make different provision for different cases or circumstances".
	The Government are expecting us to vote for a pig in a poke, because the provisions are so wide and utterly undefined, and the secondary information that we need is simply not available.
	We are certain that everything that should be done to preserve the integrity of the banking sector must be done, not least because of the 127,000 jobs in Scotland that depend on banking and finance. However, the Bill before us tonight should have been a Northern Rock emergency nationalisation Bill, containing only a few clauses. We have yet to determine whether we will support the provisions at the end of the day, and we will look at the amendments that have been tabled, but we are dreadfully disappointed by the generality of the Bill, by its extremely wide scope, and by the ability of the Government to do almost anything by order, when we should have had a much tighter and more focused emergency nationalisation Bill.

Kenneth Clarke: I will in a second, but I do not want to go on too long. Let me just put the other side of the equation. Is the objective to run the bank down? I make it clear that I support nationalisation of whatever form the Government or Opposition put forward. It is defensible if one is going for an orderly run-down of the business. That means no fire sale now, in awful market conditions. It means holding the assets, particularly the loan book, for as long as is necessary to get the best reasonable return when market conditions return to normal.
	If one is sailing on, trading, is the objective to run the bank down? I gather that the new management were giving guidance to the press that the bank would be smaller, preparing people for the fact that there might be redundancies and the bank might be scaled down. How is it supposed to do that? I do not understand how a publicly owned business sets out to run itself down. Does it decide to offer rather less attractive terms for mortgages? Does it tell its customers when they come back to renew their mortgages that it will refinance them only at a higher rate than the competition in order to drive them away? Does it reduce its savings rate after looking at what other people are advertising to make sure that it does not get too many people coming along to save?
	If the idea is to slim the business down a bit, what is the Treasury guidance? How much should it be slimmed down? Will the Treasury tell the management, "Slim it down a lot. We are really trying to get rid of it, just like the Tories, but we don't want to admit to all those north-east MPs that that is what we are doing." Or will the Treasury say, "Just slim it down a little bit. Make it look respectable. Just reduce the size of the business; get it trimmed down a little." Of course the strategic plan will have to be on more formal terms than that, but there must be guidance from the Government. Anyone running the bank now must ask the Government, "Do you want us to build the business up as aggressively as possible or to run it down? If so, could you give a bit of an indication of how much either way?" My feeling—I trust that the Minister will correct it—is that neither the Chancellor nor the Minister have the faintest idea at the moment which of those directions they are going to give.

Yvette Cooper: I think that that is right as things stand, but we would expect this issue to be dealt with more widely as part of the banking reform provisions that we are consulting on. The current measures are about having interim arrangements in place in circumstances of unprecedented turbulence in world financial markets and a global credit crunch as a result of—or triggered by—events in the US sub-prime market, as a result of which banks are not lending to each other in the normal way. These are highly unusual circumstances, and they behind the introduction of the Bill. We have repeatedly made it clear that Northern Rock is the only institution that currently meets these high tests, and we are introducing this Bill at this time so that we can deal with the problems that Northern Rock has created.
	The amendment would greatly shorten the period for completing the orders transferring the securities or business of an authorised UK deposit-taker. On that basis, we think that the tests and safeguards being introduced are significant, and having a sunset clause in place for a year should provide the House and the wider community with the reassurance that they need.

Philip Hammond: I beg to move amendment No. 12A, in page 5, line 36, at end insert—
	'(1A) No order under subsection (1) shall be made in respect of the property, rights and liabilities of a building society.'.
	The amendment continues the theme of the previous amendment to which I spoke. The Bill has been presented to the House as an emergency measure to deal with a special situation—the nationalisation of the Northern Rock bank. For clarity, Mrs. Heal, I advise the House that later we will also vote against the proposition that clause 11 should stand part of the Bill, but with amendment No. 12A our aim is to remove references to building societies from the legislation.
	It may be that there is a very good case for making some changes to the regime governing building societies. We have already had a discussion about that this evening. There may be a case for applying a regime along the lines of clause 6 in future to building societies, but there is no case to be made for including provisions relating to building societies in a Bill whose purpose is to nationalise a bank, which, by definition, is not a building society. Therefore, we seek in the amendment to leave intact all the provisions of clause 6 as they relate to banks, such as the possibility of transferring assets, liabilities, properties and rights from a bank to a company owned or controlled by the Bank of England or the Treasury in order to facilitate the partial nationalisation of a bank, which is a power that the Government say that they need. We seek to introduce into subsection (1)(a) the additional words in amendment 12A to ensure that the powers in clause 6 cannot be applied to a building society.
	If the Bill is emergency legislation, it does not need to apply to a building society. There is no immediate and pressing need to have such a provision applying to a building society. We cannot allow the Government to include in a sort of omnibus, portfolio approach any power that they think they might need in a supposed emergency Bill to deal with a specific situation.
	We have reached clause 6 in the space of an hour. It is already apparent to the House that no proper scrutiny of the provisions in the Bill is possible. The timetable means that it has not been possible for Ministers properly to consider the amendments tabled by the Opposition—to sleep on them, to consult widely on them and perhaps to decide that some of them have merit. So we get a blanket, defensive blocking mechanism, quite understandably, to amendments that Ministers have seen only a couple of hours ago. This is not the way we can agree to proceed to deal with provisions that are not explicitly needed for the immediate purpose in hand—the nationalisation of Northern Rock.
	If the Minister wants the provisions relating to building societies, she should put them in a Bill that will go through the House in the normal way, with proper scrutiny, so that we can debate with her their purpose and she can explain what she needs them for, and so that we can bring to bear the views and opinions of experts and interested parties outside the House and consider them properly. The provisions are not needed in this Bill tonight, so I urge her to agree that building societies should be excluded from the scope of clause 6.

Bob Neill: Will the Minister be a little more specific about the terms and manner in which that requirement will be set out? Will it be in regulations, a guidance note or whatever else? We have a slight concern that, particularly in a place such as Shropshire, we will have a number of very small district councils in competition with one county council that is rather large by comparison. Many people would say that that is a pretty uneven contest. How will we ensure that the officers from the district councils have a fair crack at the whip? There must be an enormous suspicion that it will not work out that way.

John Healey: I quite understand that concern. The arrangements that we put in place need to deal with those concerns and to cater for the counter argument—in some places, and in some posts, blanket open competition might create difficulties. That is precisely the balance of factors that I am weighing up at the moment. I quite understand the interest in ensuring that the final decision is set out soon and in a clear manner. That is imperative, because councils will want to try and hold on to the best of their officers to get through the period of transition and implementation.

Mark Pritchard: I am grateful to the Minister for giving way again. He is being very generous indeed, but the problem goes beyond senior managers: it is also about the dedicated and hard working staff at all levels in all the councils whose jobs will disappear as a result of the proposals. This is a Government initiative, so will the Minister assure the House that there will be no compulsory redundancies among Shropshire's hard working council staff?

John Healey: I recognise that employees in the affected authorities face a period of unsettled uncertainty, but the hon. Gentleman will surely accept that the detailed arrangements are for the local councils—the employers—to consider. The Government's job is to put in place a framework that ensures that staff are treated fairly. We have made it clear that all staff employed immediately before 1 April 2009 by the authorities that are to be abolished will become employees of the new unitary authority, and that they will be protected according to the principles set out in the Transfer of Undertakings (Protection of Employment) Regulations 2006, as if those regulations applied.
	I gave that commitment when I made the announcements on 5 December last year. It means that all staff transferred to a new unitary authority will do so under their current terms and conditions. It will then be for the new unitary councils to decide their new staffing structure, in accordance with TUPE and with the provisions of our employment legislation. That is the proper role for central Government to play: by putting in place that framework, we are giving people a degree of certainty and assurance that they will be treated fairly, but decisions about staffing arrangements will quite properly be left to the new unitary authorities that will be their employers. Those authorities will also set the terms on which they wish to employ—or cease to employ—people after 1 April 2009.

Mark Pritchard: Again, I am grateful to the Minister for giving way. I know that he wants to be seen to be generous, but he has just set out the Government's legal responsibility. Therefore, I return to my central point: if any council workers in Shropshire suffer compulsory redundancies, the fault will lie entirely at the door of No. 10 and this Government. The Minister should not try and shift the blame onto the local authorities that will have to work out the details.

John Healey: I do not see every communication that goes out of the Department, so I cannot give him that absolute assurance without checking, but I would find it highly remarkable if my Department sent out specific communications to Labour members of councils urging them to take a particular course of action or a position. If my assumption is wrong, I will certainly tell the hon. Gentleman, but that is my initial strong response to the hon. Gentleman's suggestion, which seems to me rather left-field and ridiculous.
	The first election to Shropshire council will be in May 2009, and that will be in keeping with the normal electoral cycle. Once again, the relevant provision within the order reflects a broad consensus between the county and the districts that elections should be in May 2009 rather than in 2008. By that time, of course, we expect and understand that the Electoral Commission will have been able to undertake an electoral review and to have put in place new electoral arrangements that reflect the new unitary authority and better reflect the new communities and neighbourhoods that it covers.

John Healey: The hon. Gentleman is right to make that particular point about an area such as Shropshire. The time scale will be a matter for the Electoral Commission, but I know that it has in mind the clear aim to complete the work in good time to enable candidates to be selected for any new ward boundaries, as appropriate. I know that it wishes to make sure that it has completed that work by around February next year.
	The order also provides for the cancellation of district council elections that would otherwise have taken place in May 2008—that is to say in any district that elects in thirds. In Shropshire, that applies only to Shrewsbury and Atcham, where one third of the members would normally become due for re-election in May this year. As the House will know, the Joint Committee on Statutory Instruments has concluded that if the order was approved and made, there may be a doubt about whether its provisions cancelling the district council elections in 2008 would be intra vires. In our view, there is a powerful policy case for cancelling the district council elections. There are also powers under the Local Government and Public Involvement in Health Act 2007 that will allow us to do that. I have set that argument out in detail and explained it in our memorandum to the JCSI.
	Our approach, as captured and set out in the order, provides for an effective transition that does its best to avoid disruption to services during that period, gives a good deal to the citizens and users of those services, is fair to council staff and puts in place the arrangements to create a council that will give the people, the communities and the businesses of Shropshire the local governance that they require for the future. I commend the order to the House.

Bob Neill: I genuinely thank the Minister for the care and courtesy that he always shows the House when he presents statements. We are on the fourth or fifth of these orders, which form part of what is to be a rolling programme, but the repetition of the arguments does not entirely make up for the lack of substance on some issues. Shropshire raises particular problems: there is the nature of the county, its geographic diversity, and the fact that to me—a mere outsider from London—it seems that it has no natural centres. There is also a lack of one of the things that the Minister regarded as a prime mover—a groundswell of opinion behind the proposal. There is a lack of support, and that is fundamental.
	I would not have an issue with a genuinely localist proposal, but I do not see any evidence to suggest that change in Shropshire is localist or driven by the people. The issue may be of considerable import to the county council, for which we have great respect, and which delivers well, but that is not to say that the proposal represents the views of all the people in the county.
	There is an issue that the Minister may have to consider for the future. I shall not go into it in detail now, but if we go down the route of putting in place unitary authorities in large rural areas, what do we place beneath them? How do we make sure that there is proper representation locally, as well as at county level? That is largely unaddressed in the process that the Government are undertaking, because the change is being made piecemeal. They are picking off areas that may be advantageous—dare I say it, almost for political reasons. Mischievous is the word, I think. I took a night off and went to see "A Midsummer Night's Dream" at the Royal Opera House the other night. The Minister occasionally behaves a bit like Puck, although he might not think of himself in those terms. He likes to sprinkle a little bit of mischievous dust on the local government spectrum and see what happens. What happens is not always what is intended, as we all know from the programme, the opera and the play.
	Our local government structures frequently represent entrenched concerns and identities—that is particularly true in the counties, outside London, which is my part of the world—and that is precisely why we should be particularly careful about interfering with them. The Minister will have heard me say before that a very high standard of proof must always be required, and that the burden of proof must always fall on those who propose change. I do not think that the standard or the burden are met in this case. That is the issue for the Opposition. We do not want to be obstructive about good government—we are in favour of it—but the case for the proposal has not been made.
	The Minister talks of the opinion-forming views that were taken, but he knows full well that the majority of the districts in Shropshire do not support the proposal. At least three or four of them have conducted well-researched polls, carefully constructed and controlled by the Electoral Reform Society. In internal elections, the results are generally as good for his party as they are for mine. The polls show that overwhelming majorities are against the proposal. We are not talking about a marginal majority, but about compelling evidence that points the other way; that is the point. As the Minister is a reasonable man, I might allow him a bit of subjective judgment where the situation is 50:50, but the evidence is overwhelmingly against making the change. I urge him to think about whether the measure will really help in Shropshire.
	On the transitional costs and the long-term savings, neither of us have gone into the issue in great detail, but he knows that academic experts have raised questions about how robust the county council's costing methodology is. It may be right, or it may be wrong, but it has not been tested. No objective, independent values have been applied at all. I will give way to the Minister if he wants to intervene on me on that point. A series of subjective judgments have been made, one after the other. That is the picture for all the issues.

Daniel Kawczynski: The hon. Lady says that the Government have not tried to force the measure on the people of Shropshire; she even implies that they have not tried to push the issue either way. I have to tell her that when the current Foreign Secretary was responsible for such issues as Minister at the Department for Communities and Local Government, he came to Shropshire. He spent the day in Shrewsbury and tried very strongly to convince the county council to go ahead with the proposals. I have been the MP for Shrewsbury and Atcham for three years and can say that we hardly ever see Labour Ministers in Shropshire. I do not think that I have ever seen any, apart from the current Foreign Secretary. He was determined from the start to force the issue through; otherwise, why did he come to Shrewsbury?

Richard Younger-Ross: I am grateful to my hon. Friend for giving way. I note the comments from the Conservative Benches suggesting that she should not have given way, despite the fact that she gave way to them so generously to them.
	Does my hon. Friend not think it rather ripe that the Conservatives keep intervening on her to suggest that democracy will not be served by this change, when it was the Conservative party of the 1980s that did the most to remove democracy from the UK?

Julia Goldsworthy: My hon. Friend makes a valid point, but I do not want to detain the House any longer because I want to ensure that all hon. Members get the opportunity to speak.
	The hon. Member for Bromley and Chislehurst raised the issue of whether it was credible that the proposed unitary authority would be able to deliver the criteria against which the Government assessed their plan. It is important to ask how credible the plan is, but the key question for the Minister is one of what the Government are doing to assess the new authority's delivery with regard to that plan. Of the five criteria, the key one that strikes me is that of neighbourhood empowerment. If we are to engage local communities, convince people that the change is not a county takeover and ensure that it has public support, what happens at the neighbourhood level is important. The need for communities at the neighbourhood level to understand what is going on is very important. What action will the Minister take if he is concerned that the new authority does not seem to be delivering against the plan it has been given? What steps will he take to respond to and deal with those concerns?
	On the implementation executive, despite the serious reservations that have been raised, all parties are working to make the best of what they may consider, to varying degrees, to be a bad job. The Minister owes it to them to be prepared to be as flexible as they are in ensuring the end result is the best one for the people in Shropshire.

Daniel Kawczynski: When the Minister opened this debate, he stated that there was no pressure from the Government on Shropshire either way and that they would listen to the people. I must state that the Foreign Secretary, when he was the Minister of Communities and Local Government, came to Shrewsbury and cleverly tried to court Shropshire county council to encourage it to try to put in a bid, which I alluded to earlier. This Government had their fingers burnt in the regional referendum in the north-east, so they came up with a very good ruse, which is to pitch one council against another, and to get one council to put in a submission. They can then say, "Oh well, it is you that has bid for this", when that is simply not the case.
	I asked the Prime Minister his very first question in the House of Commons, and it was about this issue. You always remember the first time that you do something, Madam Deputy Speaker, whether it is your first kiss, or the first time you get elected to Parliament. I very much hope that the Prime Minister will remember the first ever question that he took at Prime Minister's Question Time. I asked him whether he would meet me to discuss my concerns about the conduct of the Government in this matter. He assured me in this House, at his first Prime Minister's questions, that he would do that, and that the Secretary of State for Communities and Local Government would also take the opportunity to do so. Despite numerous written requests, I have not been allowed to have that meeting with the Prime Minister or the Secretary of State. That is different from the former Prime Minister. When I asked to see Mr. Blair, the meeting was arranged straight away and there was some accountability. To where have we descended when the Prime Minister promises to discuss a Member's concerns about such an important issue, which will fundamentally affect my county, then reneges on the promise, and the Secretary of State repeatedly refuses, despite my written requests, to see me to talk about the matter? That is disgraceful.

Daniel Kawczynski: As the hon. Gentleman knows, I was not discussing kissing the Prime Minister; I certainly would not want to do that. The hon. Gentleman's comment was rather flippant, but I was making a serious point.
	Eighteen thousand of my constituents came to the ballot box in the referendum to vote against a unitary authority. It is sometimes difficult to get members of the public interested in and participating in what can be rather technical matters. Yet 18,000 men and women in my constituency turned up and voted. They did not want a unitary authority in Shropshire. Nearly 70 per cent. of those who voted voted against.
	The Minister has received letters of support and he says that the Government have taken people's views on board. As I tried to say earlier, some of the organisations that wrote the 47 letters of support are companies that supply the county council with services and goods and therefore have a vested interest. It is fascinating to read some of those letters of support. One said, "Well, we'll have to work with whatever happens and whatever is the status quo." Yet that counts as a letter of support. It is breathtaking. Some organisations—I do not want to embarrass them by mentioning them in the House—have told me that they regret submitting letters of support. Some were put under a certain amount of pressure to do that.
	I passionately believe in local accountability. My accountability to my constituents drives me on a daily basis. That is why, when I was elected to Parliament, I decided to move to the village of Shawbury in Shropshire, which is only a few miles from my constituency office. People can hold me to account when I am in the local supermarket, walking down the street or in my office. That is part and parcel of local accountability.
	We have some marvellous councillors in Shrewsbury, such as Mrs. Judith Williams, who has been a local borough councillor since 1982. Those councillors know every flagstone of every pavement in their ward. They are local Shrewsbury men and women, who know the town, feel passionately about it and are accountable to their constituents. They have done an excellent job in running the borough council. They are accountable because they live in their wards, so they are close to their constituents. Most important, they are accountable through the ballot box to the people of Shrewsbury.
	If we have a unitary authority, councillors—I do not want to disparage other areas—from Ludlow, which is 30 or 40 miles away, Whitchurch and places long distances away from Shrewsbury will make decisions on specific parochial issues that affect Shrewsbury. That is a tremendous threat to local democracy.
	Let me give an example of a controversial issue. We recently considered the possibility of congestion charging in Shrewsbury. Voting for congestion charging in Shrewsbury is very easy for someone who lives 40 miles away and is not accountable to the people Shrewsbury. Why? Because someone in that position can vote for something controversial for Shrewsbury knowing full well that their constituents 40 miles away do not really care and will not vote them out in an election. That bond and that accountability will be broken.
	We face another important issue: the co-location of the sixth-form college with SCAT—Shrewsbury college of arts and technology—which is a major college. Again, I want local councillors in Shrewsbury, who understand transportation issues and some of the infrastructure problems in Shrewsbury and who are accountable to my constituents, to make those decisions, not people who live so far away from my community.
	I want to give another example of why I feel so strongly about the issue. Over the past three years, I have said to many organisations in my constituency that I will give £100 to anybody who can name me the seven Members of the European Parliament who represent us in Brussels, but so far I have not lost a penny. Not a single constituent of mine can name all seven Members of the European Parliament. They are important people, and the Conservative ones are very good— [ Interruption . ] But the Liberal one is terrible.

Daniel Kawczynski: The reason I make that point is that none of the MEPs lives in Shropshire and none of them work there. They work in Brussels, so nobody knows who they are, yet they make important decisions, on a daily basis, on issues affecting Shrewsbury and Shropshire. The reason why there are such low turnouts in elections to the European Parliament is that nobody really knows those people and that they are not directly accountable to constituents. I fear that that will happen with a unitary authority. People will become disfranchised and uninterested in local politics, because they do not have that proximity to their elected officials.
	I am a great believer in the saying, "If it ain't broke, don't fix it." Shrewsbury and Atcham borough council has been rated as excellent. The Minister will know the extraordinary achievements of the council. He will know of the many times that my council has come to the House of Commons to receive various national awards. All those things have been achieved despite the fact that my council receives £80 less per household than neighbouring Telford and Wrekin council. Despite that, we still provide tremendous services, yet the Minister wants to abolish my excellent-rated borough council and amalgamate it with all the others. As a result of the Minister's moves, we have lost our chief executive, Mr. Robin Hooper, an extraordinarily professional and dedicated man, who achieved an amazing amount for Shrewsbury and its infrastructure. However, he has left as a result of the Government's push for a unitary authority.
	What worries me now—I want to hear from the Minister about this—is the next 12 months. They will be critical, because many people are working hard at the borough council to provide good services, but they know that it is going to be abolished by April next year. There will obviously be a certain amount of tension among managers, as some of them look for other jobs, perhaps in the private sector. We are therefore in a difficult position. I do not want services in Shrewsbury to suffer as a result of the coming 12-month interregnum.

Philip Dunne: Today is a dark day for democracy in Shropshire. According to the Government, Shropshire has an excellent council. It has just had its four-star rating confirmed for the second year running, and it is improving strongly. I do not know how it can do that if it is already top-rated, but apparently it can. I regret to say that this change is being proposed for no other reason than to put into effect a party political plan to reduce the number of Conservative councillors and, potentially, Lib Dem councillors—Opposition councillors—in Shropshire.
	At present, the two-tier system provides representation close to the people. With one county council and five district councils, we have a total of 244 councillors in Shropshire. That will be reduced to 75 under the proposals. We shall go from having one county councillor representing approximately 4,000 people, and one or two district councillors representing between 1,000 and 2,000 and a bit people, to one unitary councillor representing 3,000 people. So most people will lose the opportunity to be represented by at least two—in some cases, three—councillors, and will instead be represented by only one.
	My constituency, the eighth largest geographical constituency in England, will change from having 58 district councillors and 15 county councillors—a total of 73—to having about 20, depending on what comes out of the boundary committee proposals. Inevitably, by definition, there will be less local knowledge available to those councillors and therefore less local representation. That point was made forcefully by my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski). The decisions will be taken remotely. The base for the new council will be in Shrewsbury, which is some distance from my constituency. Some people will have to travel for more than an hour just to attend a council meeting— [ Interruption. ] The hon. Member for Hereford (Mr. Keetch) suggests that that is already happening in Herefordshire, and I take it that he is not particularly happy about that.

Philip Dunne: I have taken a position against unitary primarily because of the lack of democratic accountability, and not for any other reason. I am not opposing it simply for opposition's sake. I believe that it is fundamentally wrong to remove decision making from a location close to the people and, to a degree, to centralise it in the county.
	I have been encouraged in my position of principle by the response to the ballots across Shropshire. The Minister made the point that some independent assessment was made of the quality of questions and responses to the ballots. The ballots were on questions agreed with the Electoral Commission. The hon. Member for Falmouth and Camborne (Julia Goldsworthy) tried to argue that there was an unfairness in the way in which the questions were presented. South Shropshire district council, which was then Liberal Democrat-controlled, put out a 16-page booklet, "South Shropshire Matters", along with the ballot paper. The council was in favour of unitary, so the opponents were given a total of two and a half pages to make their case, while the proponents—as it happens, the Liberal Democrat proponents—had 13 and a half pages. Where is the fairness in that? Despite the overwhelming information bias in favour of unitary, the people who bothered to vote—it was a high turnout of 57 per cent. rather than the 56 per cent. I mentioned earlier—voted against unitary. That makes me feel that I am in touch with what people in my constituency want.
	The greatest support, as my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) mentioned earlier, has come from stakeholders. The stakeholders obliged to be included in the consultation were by and large public sector bodies paid for out of the public purse, so it is no surprise that they came up with the answer that the Government wanted—they are paid to do so. The whole consultation exercise has been a complete sham.
	As to democratic accountability, one of the arguments in favour of removing a tier of local government was that it would be more transparent, simple and clear for the people to understand to whom they should be talking about what. Yet under the proposals Shropshire is moving from a two-tier authority in some areas to a four-tier authority. Let me explain that to the Minister in case he has not understood how that will happen.
	The unitary council will be at the top. The councils have decided that it will not be practical to run some of the committees on a unitary basis, particularly regulatory committees for planning and licensing, so they are going to set up three areas—north, central and south—underneath the unitary tier. As part of their submission, they had to say that there would be local area committees underneath that. We are to have 27 of those; we are to move from five district councils, which managed the regulatory function and everything else in the past, to the new system of three tiers in the unitary authority. In addition, because some areas with significant populations—Shrewsbury and Atcham is a case in point—did not have a town council, a new town council will be established underneath the three tiers of the unitary. Where is the simplicity in that? It fails that basic test of the Government's own making.
	I want to touch on some of the practical implications of what the Minister is proposing. He said that he understands the imperative—I think that that was the word he used—of setting out clear orders in respect of which officers will be subject to open competition and that he would publish that shortly. I am afraid to say that here we have yet another example of the Government's difficulties in introducing this legislation, which have arisen ever since the Bill was first published.
	I have already referred to the public involvement in health clauses, which were tacked on as an afterthought; they had nothing at all to do with local government reorganisation. That characterised the passage of the Bill. It has been a second-rate piece of legislation pushed through at the back end of all the other bits of legislation, partly because the Ministers responsible have chopped and changed every six months—I think that we are on the third Secretary of State from the Department responsible. That is causing considerable concern among the very officers who, as the Minister rightly pointed out, need some clarity about their position. They have no knowledge from one week to the next of when the legislation will be enacted.
	The legislation was originally to be concluded before the election that never was—that pushed it back into the latter part of last year. Then it was pushed into the early part of this year. We were supposed to be debating these measures on 4 February and here we are on 19 February. The boundary committee has told the authorities in Shropshire that if the passage of the measures is not concluded by the end of this month, it will not be able to introduce the boundary changes in time for the elections in May 2009. It is saying—and the Government have endorsed this—that the unitary authority may have to be established on existing county council boundaries, with a doubling up of councillors, because that would be the easiest way in which to proceed. What a way to set about reorganising local government. It is completely shambolic, and it is a direct result of the way in which the legislation has been handled. The lack of clarity is causing considerable frustration among the officers who must deal with this.

Philip Dunne: I hope the hon. Gentleman will excuse me if I do not. My time is very limited.
	I want to raise again the point about officers' grades being open to competition. I look forward to reading the proposals that the Minister will publish shortly. I understand his argument about the need for fairness to individuals and his view that the Transfer of Undertakings (Protection of Employment) Regulations 1981 should apply, but this is not unique territory. In the corporate world companies take over other companies of both similar and differing sizes, and TUPE applies in those cases, but in those cases the best person for the job gets it. In some cases none of the incumbents gets the job, and a replacement is recruited from outside. I see no reason why that should not apply to the most senior grades in this instance. The directors of each major service area in particular should undergo an open process, so that the population at large can feel that it is not just a stitch-up by the county council—which, I am afraid, is the impression that they have had.
	The council will continue to face challenges when it becomes unitary. It has been argued that this proposal is about financial resources and efficiency savings. Over the past 10 years, the Government have allocated funds to match their own priorities. As a result, the allocation of funds to areas such as education which are the responsibility of a unitary authority, and organisations such as the police which are funded through council tax, has been heavily skewed towards inner-city urban areas which, by coincidence, happen by and large to be represented by Labour Members of Parliament. Such allocations have been justified by a plethora of data to do with deprivation, crime, social needs, health inequalities and so on. With much of that I have no argument—I think it appropriate to take such matters into account—but a degree of balance is needed.
	Operating services in rural areas costs money. In those areas, it costs more to deliver many of the services for which local authorities are responsible than it does in urban areas. Waste collection, for example, is relatively straightforward if populations live within a few miles of each other, while school transport is obviously more expensive when people are having to be bussed long distances—many more of them, because fewer are able to walk.
	The provision of elderly care is much more expensive in rural areas, particularly when efforts are being made to move care closer to the community—which I support—and to establish a network of district or other specialist nurses to provide services in people's homes. That is much easier to do in an urban environment. Not only is it easier to recruit people to do the work, but they can use their time much more effectively if they can walk or drive short distances from one patient to the next. In some areas in my constituency, a district nurse can deal with only five appointments a day because so much of her time is spent travelling from one person to the next. If the Government had taken those issues into account, much of the justification for the unitary proposal would not have been necessary.
	Let me give the Minister a couple of examples of the splendid work done by councillors in my area who are fighting for their local communities. Many of them may well not wish to become councillors in a unitary authority, because of the time commitment that that would involve. I want to single out Joe Meredith, currently serving his third term as chairman of South Shropshire district council. He is fighting for the post office that is under threat in his village of Ashford Carbonnel, and for two schools that are under threat of amalgamation. His deputy leader, Councillor Jackie Williams of the Kemp Valley ward, is doing a valiant job while her chairman is indisposed, fighting for her post office and school at Lydbury North which are threatened with closure.
	Those stories could be repeated right across my constituency, and in other parts of Shropshire. Many of these valiant, public-spirited people might not continue their lives in public service because they do not wish to do so within a unitary environment, which would be a great loss to the fabric of public life in this country.

John Healey: Well, let me move on to my second point. Purely in financial terms, having checked the figures, the quantifiable gains to the council tax payers of Shropshire will be about £9 million each year.
	The hon. Gentleman confirmed at one point that he was talking about Professor Chisholm. Professor Chisholm's modelling of the potential financial impact of this restructuring was based on the 1990s model of restructuring, which was entirely different as it was about breaking up large areas such as Humberside, Cleveland and Avon into smaller units. We are doing something different and the potential efficiency gains—for the council tax payers and the services that support them—are much greater and more significant.
	The hon. Gentleman made an extraordinary argument, accusing me of running a dirigiste process, imposed from the centre. The hon. Member for Falmouth and Camborne (Julia Goldsworthy) was absolutely right: this is not being forced on councils. A minority of councils in England submitted proposals under this process, and the proposal we are discussing was submitted by a Conservative-led county council supported by a Conservative-led district council. A minority of councils submitted proposals as a result of the invitation we issued, and a minority of those that were submitted were accepted for implementation.
	There was an interesting observation about the courtship of the county by the then Local Government Minister, my right hon. Member for South Shields (David Miliband), now the Foreign Secretary. Far from unitary solutions being forced on Shropshire, councils, business and some public service providers and users told him on his visit that the two-tier arrangement was not working and needed to be changed.

John Healey: We are not setting our face against that arrangement, but we set out in the White Paper and in the context of the invitation why in many instances there were problems with the two-tier arrangements. My point is that we are not forcing solutions. In his former role, my right hon. Friend had similar discussions in Gloucestershire, East Sussex, Lincolnshire and Lancashire, and none of those authorities produced proposals for unitary status.
	May I say to the hon. Member for Ludlow (Mr. Dunne) that he cannot argue that the arrangements will take decisions out of people's reach and then criticise the detailed proposals for the area partnerships and the joint local committees, which are precisely designed to put decisions and budgets closer to the neighbourhoods and within reach of local people. I hope that he and his hon. Friends will work to strengthen those arrangements over the next year, because they are the basis for a sensible and important reform of the way in which local people can be involved in decisions.

John Healey: No. I am going to come on to the hon. Gentleman's point about the Prime Minister. The Prime Minister told him in response to a question:
	"Of course we will listen... the Secretary of State for Communities and Local Government or I will be pleased to meet him after that action"
	—the judicial action that his council is pursuing—
	to discuss the next step forward."—[ Official Report, 4 July 2007; Vol. 462, c. 950.]
	Of course, the hon. Gentleman's local authority spent heavily in the courts and lost in the High Court. The appeal was heard at the end of January and we await that judgment. My right hon. Friend has not broken any of the commitments that he gave to the hon. Gentleman.
	The Electoral Commission will examine the issue of large wards during the review before the May 2009 elections. I say to the hon. Member for Ludlow that if this were about simply reducing the number of Conservative councillors, why is this proposal being put forward by a Conservative-led council?

John Healey: I will certainly not give way to the hon. Gentleman.
	Conservative Members are right to press their arguments hard in debate, but if and when the order is passed, I hope that they will accept the decision that has been taken. I hope that they will accept that it has been properly approved by Parliament, and I hope that they will lend their weight to the efforts of those implementing it.
	 Question put:—

Madam Deputy Speaker: I propose to put together the Questions on the three motions.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

David Tredinnick: It is unusual to start a debate at quarter to two in the morning these days, although a few years ago we were regularly here a lot later. I am pleased to have the opportunity to introduce this important debate about the threat to the homeopathic hospitals. Their very survival may be at stake and I look forward to hearing from the Minister.
	This debate comes at a time when support for homeopathy is at an all-time high, including in the House, with one third of Members signing early-day motion 1240 in the last Session, in support of homeopathy. The Government claim to support choice in health care, but as far as homeopathy is concerned, they are reducing choice. It is not commonly known, but homeopathy has always been available on the health service because its founder, Nye Bevan, had a homeopathic doctor and insisted that that was the case.
	In the UK we have four homeopathic hospitals, one in Scotland and three in England. I attended the opening of the beautiful new Glasgow homeopathic hospital before devolution, and it now of course comes under the purview of the Scottish Parliament. I understand that that hospital is protected since a successful campaign in 2004, but that is not the case for the three English hospitals—the Royal London, Bristol and Tunbridge Wells homeopathic hospitals.
	The three hospitals are fully integrated into the NHS. They all form part of their local NHS trusts and are staffed by statutorily regulated health professionals with additional training in complementary medicine. All receive patient referrals through normal NHS routes. They have some of the highest patient satisfaction ratings in the NHS and the majority of patients report improvements to their lives across a range of chronic conditions. The treatments employed are clinically safe and cost-effective. They often avert multiple referrals and treatments that many patients find ineffective and the cause of side effects. In addition to homeopathy, the hospitals now offer a full range of complementary therapies.
	The flagship hospital is the world-renowned Royal London Homeopathic hospital. I have been the chair of the parliamentary integrated health care group and I used to be the treasurer of the all-party parliamentary group for alternative and complementary medicine. For almost all of my 20 years in this place, I have been an officer of one or other group, so I have had a long association with the Royal London and I believe it to be a very valuable asset. It is the largest and best integrated public sector provider of complementary medicine in Europe. It is also part of the University College London Hospitals NHS foundation trust.
	The Royal London provides some 25,000 new and follow-up out-patient appointments a year. Until recently, the number of referrals had been steadily increasing. What has gone wrong? Well, eight primary care trusts have withdrawn their contracts from the Royal London in the last 18 months and patient referrals are down by 20 per cent. on the same period last year. There is great uncertainty about the intentions of the host PCT Camden and its neighbour Islington. If they were to withdraw their support or substantially reduce it, the consequences for the hospital would be very serious. The reduction in referrals has meant that parts of the newly developed building—I attended its opening—are now being used for other services. Despite those problems, the hospital is in discussion with the trust about the proposed polyclinic; it is developing integrated care pathways, integrating complementary and conventional approaches; and, as always, it is pioneering this field of health care.
	As for the other two hospitals, West Kent PCT is responsible for the Tunbridge Wells hospital and, sadly, it will withdraw its support from April 2008. That decision has been temporarily rescinded pending a legal challenge by patients. I urge the Minister to look closely at what happened at Tunbridge Wells, where the decision was very unwelcome. Bristol homeopathic hospital has also suffered considerable cuts.
	So, why is there a problem? The Government claim that they are increasing choice, but the impact from the perspective of a homeopathic hospital is quite different. If the Minister reflects on the White Papers that have been published in recent years, he will see that they all suggest that choice will increase. "The NHS Improvement Plan", published in 2004, states:
	"By 2008, patients referred by their GP will be able to choose any provider able to meet NHS standards and to deliver care at tariff."
	That appears to guarantee the right to choose treatment at the homeopathic hospitals. The December 2003 document, "Building on the Best: Choice, Responsiveness and Equity in the NHS" stated that NHS services should be "more responsive" to patients. The January 2006 document, "Our health, our care, our say" states:
	"We will give people a stronger voice"—
	so that they can see a service improvement. The 2004 White Paper stated the intention to give the public more informed choices as regards their health. The Government are certainly failing to do that as far as the homeopathic hospitals are concerned.
	Another issue is the introduction of evidence-based practice, which tries to specify the way in which professionals or other decision makers should make decisions. Naturally, as its name suggests, it places a greater emphasis on evidence. The practice guide, however, asks for evidence-based design and development decisions to be made after reviewing information from repeated, rigorous data-gathering. That militates against complementary and alternative medicine, where there may not be a huge number of rigorous or repeated databases to work from. There is not a vast quantity of studies and that has been used against complementary medicine as an excuse. The methodology of assessing CAM might also be unfamiliar to primary care trusts. It might also be difficult to record accurately exactly how homeopathy, for example, treats. It is always different for individual patients, and that can be difficult to record. Sometimes, the treatments require a combination of remedies.
	My next point is that homeopathy does not fit normal—that is, orthodox—methods of assessment. For example, the scale of prescribing is in reverse so that the weaker the dose, the more powerful or effective it is. That subject has always been hotly disputed by many doctors, but homeopathic treatments have been operating on the reverse scale of prescribing for 200 years. Some of the most powerful—the constitutional remedies—are so diluted that they can hardly be detected. There are similar problems with acupuncture and its acceptance, as some doctors and commissioners do not necessarily believe in meridians. The same issue occurs with herbs that are unknown in this country.
	Another simpler explanation of why complementary services, and the homeopathic commission in particular, have been cut recently is that they are the easiest therapy to cut. Just as advertising gets cut when times get hard in business, when the primary care trusts try to balance their budgets under the new devolved arrangements they often go for homeopathy and other complementary therapies as the soft target.
	The most important point that I want to make to the Minister is that I believe that we need proper guidelines on commissioning for primary care trusts. I have said as much several times at Health questions. At present there are no proper guidelines, with the result that PCTs have little direction at a time when many are under financial pressure. Indeed, they often cite that financial pressure as one of the main reasons for not commissioning homeopathy.
	Also, PCTs claim that there is not enough evidence to support the use of homeopathy. However, the Royal London Homeopathic hospital has conducted more than 130 randomised and controlled trials of homeopathic treatments that show very effective results, so surely it is in the Department's interests to make sure that those results are publicised to PCTs.
	The Smallwood report took a look at the cost-effectiveness of complementary medicine. Smallwood argued strongly that some complementary therapies were more effective and cost-effective than traditional treatments. He also wanted the National Institute for Health and Clinical Excellence to assess their cost-effectiveness, but that has never been done. I hope that the Minister will be able to help with that. I intend to write to the Public Accounts Committee to see whether it will undertake an assessment, and I have had discussions to that effect with my hon. Friend the Member for Gainsborough (Mr. Leigh), who is that Committee's Chairman.
	Another problem that homeopathic hospitals have had to face is ill informed and hostile media coverage, as well as a dirty tricks campaign. The Minister may recall that in May 2007 some doctors issued a spurious document—printed on official paper, with the NHS logo—claiming that homeopathic services should be decommissioned. The Government have never written to PCTs to refute that document.
	I want to allow the Minister time to reply, because the fate of the Royal London Homeopathic hospital is of great concern internationally. I shall illustrate that, and the importance of the treatment, by looking at the results that have been achieved in Africa by homeopaths who have been trained at the hospitals that I have mentioned. Those results are especially instructive, as the homeopaths involved are treating patients with AIDS, HIV or other serious diseases such as malaria, in countries where the problems are very great.
	For example, at Kendu bay in Kenya's Nyanza province, the Abha Light foundation is an organisation that partners mothers and orphans in the rural community who are suffering from AIDS, and it has had great success in returning those people to an active life. There has also been considerable success in the use of the local herb product called neem as a homeopathic medicine. It has produced what has been described as
	"a convincing reduction in malaria attacks"
	in a highly endemic area.
	I shall close with a note about what is happening in Swaziland in southern Africa. I know a homeopath who has worked there well, and I asked her for a description of what was happening in the clinics there. Her letter to me states:
	"Seven years ago I introduced Homeopathy to Swaziland, providing a community of 10,000 people with the only health care available to them. In addition I travelled around with a mobile clinic reaching other very remote areas. On an average day I could see up to 50 patients...Five years ago I built a homeopathic clinic...it was so successful that the people wanted to ensure my tenure which ensured their continued treatment on a daily basis."
	The letter goes on to say that other homeopaths were brought in to help, and that the clinic treated patients who came from as much as 300 miles away.
	"Aside from the predominant treatment for HIV, TB and malaria, treatment is being given for many other common ailments such as urinary infections, diarrhoea, skin eruptions, diabetes, epilepsy, eye infections, intestinal parasites, treatment from pregnancy to childbirth, to more serious but locally common ailments like cancer, gangrene, toxaemia...and general injuries...In other words the list is endless."
	The letter states that the homeopathic treatments have achieved success rates of close to 100 per cent.
	"As a result many lives have been saved, and pain and misery alleviated, in a community which can simply not afford orthodox treatment even if it were available."
	That is a very important issue for developing countries. Homeopathy is so inexpensive that it is available to everyone. When homeopathic services are introduced, they tend to increase in size very quickly. My acquaintance's letter goes on to say:
	"The low cost of the remedies and the relatively short dosage period, together with the positive results of the treatment are responsible for the expansion and ever increasing demand in a Country that is unable to give the majority of the population even the most basic of health care. Therefore, Homeopathy is excellent value and has saved countless lives as well as alleviating the suffering of the countless unemployed, elderly and orphaned in Swaziland.
	We will of course continue with our work. At the end of a day, when we simply cannot see any more patients, the remaining untreated patients usually start fighting among each other as to who will be the last to be seen. A true vote of confidence!"
	I hope that the Minister can reassure me on guidelines for primary care trusts so that we have more effective commissioning. I hope that he will refute those statements made in the name of his Department and that he will commission NICE to look at the cost-effectiveness of homeopathy in line with the request of the Smallwood report. I look forward to the Minister's reply.

Ivan Lewis: I congratulate the hon. Member for Bosworth (David Tredinnick) on securing this Adjournment debate and on his passionate advocacy of the case for complementary therapies over many years in this House. Whatever people's opinions and differences of view and perception, it is impressive when an hon. Member feels so passionately about an individual cause. Clearly, the hon. Gentleman feels that homeopathy makes a massive difference to the quality of people's lives both in his constituency and up and down the country. I pay genuine tribute to him for the work that he does in making the case.
	I am also aware that there is a growing interest among patients in complementary therapies generally—for instance, as an adjunct to conventional medicine in palliative care, although I accept that it goes beyond that. Choice is absolutely fundamental to the delivery of a truly patient-centred national health service, and it gives providers the incentive to tailor services to the needs and preferences of patients. In turn, this leads to better outcomes and, over time we hope, a reduction in health inequalities. Primary care trusts are encouraged to provide access to complementary therapies where there is evidence to support the virtues of their use.
	Of course, doctors are accountable for any treatment that they give their patients, and have to satisfy themselves of the safety and clinical and cost-effectiveness of the treatment, as well as the availability of suitably qualified practitioners. They have a range of options for treating different conditions, and they must advise on which treatment or combination of treatments will be most suitable for individual patients. Many GPs now give access to some form of complementary or alternative medicine, but if a doctor decides not to recommend a complementary therapy, it is likely that he or she will have a good reason.
	We genuinely want people to have free choice about their health care, but we also want to make sure that the choice that they make is an informed one and gives assurance that treatments meet key standards of safety and quality. To achieve this, the Department and the NHS have been ensuring that as much quality information as possible is available and accessible to those who need it.
	For example, the Department of Health commissioned the Prince's Foundation for Integrated Health to produce a patient guide on popular forms of CAM, which was published in 2005. It is encouraging to know that several thousand copies have been downloaded from the website and multiple copies have been ordered by intermediary organisations such as hospices.
	NHS Direct Online and the national electronic library for health are also authoritative sources of advice on all health topics. NHS Direct already includes some material on complementary and alternative therapies and in future the national electronic library for health will also have a separate section dedicated to research on such therapies. In June last year NHS Choices was launched—a new online health information service, which also includes information on homeopathy.
	Of course I hear the dissent from those who oppose the NHS commissioning complementary medicine. Most, if not all, of that opposition is focused on treatments for which, in some people's view, there is a lack of evidence of effectiveness. We know that there are strong views, which are sometimes articulated in the House. That is why the Government are investing in developing the evidence base for complementary therapies. We are supporting the research capacity for CAM through the £3.4 million CAM personal award scheme. The scheme was launched following publication of a House of Lords Select Committee report on CAM about eight years ago. As a result of two calls, we have successfully created a cohort of 18 CAM researchers at doctoral and post-doctoral level; as the hon. Gentleman will be aware, they are working on a broad range of research issues.
	The National Co-ordinating Centre for Research Capacity Development is responsible for the personal award scheme. It also funds the CAM evidence online database, which is the result of collaboration between the Research Council for Complementary Medicine and the University of Westminster's school of integrated health. It involves a detailed review and critical appraisal of the published research on specific complementary therapies, focusing on their use for NHS priority issues, such as cancer, mental ill health, heart disease, stroke, and chronic conditions.
	We are actively addressing the important issue of appropriate regulation of the treatments and their practitioners. At present only two CAM professions are subject to statutory regulation in our country: chiropractic and osteopathy. Our first priority is to decide whether to put in place statutory regulation for herbal medicine, traditional Chinese medicine and acupuncture, which carry significant risk because they involve skin piercing and/or the ingestion of potentially harmful substances. Proposals for regulation of herbal medicine, traditional Chinese medicine and acupuncture were made in a report by the House of Lords Select Committee on Science and Technology in 2000. The Department of Health consulted on proposals in March 2004 and published an analysis of the results in February 2005. As a result, a steering group was established in June 2006 to recommend whether and how those professions should be statutorily regulated. The group, chaired by Professor Mike Pittilo of Robert Gordon university, has completed its work, as the hon. Gentleman will know. Its report will be submitted to Ministers shortly, and a decision will then be taken about whether legislation should be brought before the House, and if so, how soon.
	We expect unregulated CAM professions to develop their own unified systems of voluntary self-regulation, and to support that process we have commissioned and funded the Prince's Foundation for Integrated Health to develop voluntary self-regulation among a range of professions, including homoeopathy. The result of the work is a voluntary regulator called the complementary and natural healthcare council, which, as the hon. Gentleman will be aware, will be up and running from April.
	In 2005, the Medicines and Healthcare Products Regulatory Agency undertook a public consultation on proposals that would enable companies to market their products with indications. As the hon. Gentleman will know, indications are descriptions of diseases or conditions for which the product is intended to be used, but we are talking about minor, self-limiting conditions only—the types of conditions that people normally self-treat with over-the-counter products. Following widespread support for the proposals, the scheme was introduced in the United Kingdom in September 2006. Companies marketing homoeopathic medicinal products have the option of obtaining a full marketing authorisation for each product, provided they satisfy the requirements for demonstrating safety and efficacy set out in directive 2001/83/EC. However, at present no homoeopathic products are licensed with a marketing authorisation because of the difficulty of demonstrating efficacy under the rigorous conditions of controlled clinical trials.
	The hon. Gentleman raised a number of issues to do with the future of specific services, and he referred to several hospitals. There is a constant tension in debate inside and outside the House about the balance between national command and control and devolution to local decision makers—the local people and organisations to whom we give the responsibility of making the best decisions for local communities.
	The fascinating thing, as I have said in previous debates in the House, is that on the whole, politicians of all parties are united around the notion of maximum devolution and localism, until they find a decision that is made in their locality that they do not like very much. Then, the same politicians advocate national intervention and command and control from Westminster and Whitehall. That perpetual tension is evident in the House.
	In this case we must maintain the principle that, based on patient choice, demand and a needs assessment of their local population, local commissioners are best placed to make commissioning decisions on behalf of their local populations. It is extremely important that we retain the integrity and credibility of that process if we are to move towards a world class commissioning system in health care.

Ivan Lewis: In my speech thus far, I have articulated clearly the Government and NHS position on complementary therapies, so I hope that any documents that have been circulated and that give a false or misleading perception will be corrected by the record. The hon. Gentleman may pray those comments in aid, if he so wishes. Beyond that, primary care trusts in every and every part of the country have a clear set of priorities that the Government lay down for the outcomes that they are expected to achieve with regard to health and well-being in their local communities. A range of other choices are left to primary care trusts to decide in the best interests of their local communities.
	The hon. Gentleman should be a little more frank in his contribution. Under any Government there are finite resources. There is no doubt that under the present Government an unprecedented level of resources has been invested in the national health service in the past eight or nine years. Beyond the clearly defined and understood priorities, any system will require commissioners to make difficult choices. Based on the needs of their local population, based on what patients and carers tell them about what matters most, and based on evidence and outcomes, commissioners will be required to make those choices. Beyond the clear national priorities and the NHS operating framework that we issue to chief executives of primary care trusts, it is not for Ministers sitting in offices in Westminster and Whitehall to tell PCTs how they ought to make those daily difficult decisions.

David Tredinnick: There is a misunderstanding of the capabilities. A general descriptive note would be helpful.
	 The motion having been made  after Ten o'clock , and the debate having continued for half an hour, Madam Deputy Speaker  adjourned the House without Question put, pursuant to the Standing Order.
	 Adjourned at fourteen minutes past Two o'clock.